Avalanche-based DeFi-platform Nereus Finance suffered an arbitrage attack via a USD 51m flash loan. Decentralised exchange (DEX) Trader Joe’s and DeFi-based platform Curve Finance have also allegedly been hit by the exploit.
Neither Avalanche nor Nereus has yet made an official statement on the matter.
Dr Martin Hysbock, head of research at Uphold, said Snowtrace’s blockchain data showed that the attacker used borrowed funds to manipulate the price of AVAX tokens on Nereus. After the arbitrage transactions were completed and the loan repaid, about 370,000 USDC remained in his address.
The fraudster then transferred the illegally obtained funds from the Avalanche blockchain to the Ethereum network and exchanged them for 194 ETH and 15,800 DAI.
A recent report by CertiK noted that more than $2.33 billion has been lost as a result of attacks on Web 3 projects – there have been a total of 377 attacks so far this year.
Of those, 44 were in August. Seven of the attacks were Flash Loans attacks.
However, the report also noted that:
“August boasts the lowest total loss since February this year, and the $1 million mark was not even crossed. During the 7 attacks we recorded $745,244 in damage, down 95% from the previous month, July. The average loss per attack this month was $106,463, the lowest amount lost due to credit manipulation that we at CertiK have ever recorded.”